Age of the Home Office: Are Remote Employees Saving Companies Money?

The COVID-19 pandemic has changed the way that we approach work. Jobs that were once considered location restricted are being successfully executed out of home offices all across the globe. While working remotely has become more popular with advances in technology over the last few decades, the pandemic has forced a dramatic shift in worker location. This is bringing benefits to both employees and companies.

Recession is a period іn which thе grоѕѕ domestic рrоduсt (GDР), thе аmоunt a country рrоduсеѕ and ѕеllѕ declines fоr twо or more соnѕесutіvе fіnаnсіаl quarters. In оthеr wоrdѕ, a соuntrу’ѕ fіnаnсеѕ аrеn’t grоwіng, thеу’rе ѕhrіnkіng. Whеn соnѕumеr ѕреndіng gоеѕ down, buѕіnеѕѕеѕ аdjuѕt thеіr strategies. Thіѕ mеаnѕ thеу hіrе fеwеr people, lау off ѕtаff, and buy fewer ѕuррlіеѕ frоm оthеr businesses. Thе unemployment rаtе grows аnd соnѕumеr confidence рlummеtѕ furthеr.

There are many financial benefits to employers to move employees to home offices. Each company needs to evaluate its workforce, the type of work being performed, and the costs associated with having employees in physical locations.

Salaries – Employees who work remotely have reported personal cost savings due to reductions in travel expenses, parking, eating out, and purchasing work attire. On average, this savings is between $2,500 and $4,000 a year. Because of this, employees are willing to accept a lower salary in exchange for the benefits of working remotely. According to one survey, 45 percent of employees were willing to take a pay cut of 10 percent or more to have the option to work from home.

Real Estate Costs – Having a physical space for your employees is very expensive. Costs include leases, property taxes, insurance, utility costs, building maintenance, and janitorial services. Moving employees to home offices reduce these costs as companies require smaller real estate portfolios.

Absenteeism and Productivity – Research shows that employees are happier and more productive when working from home. Stanford University found that remote workers are 13 percent more productive than traditional office workers. Remote workers are also less likely to be absent due to illness or other situations such as car trouble or childcare issues.

Disaster Preparedness – Interruptions in business operations can have a major financial impact on companies. By allowing people to work remotely, companies can secure a workforce that is geographically dispersed. In the event of a disaster such as an earthquake, hurricane, or flood, the company can continue operating and servicing its clients.

Turnover – When an employee quits, replacing them costs a company between 50 to 60 percent of the position’s salary. Fortunately, turnover can be reduced by allowing employees to work remotely. Companies are seeing their attrition rates cut in half by simply allowing employees to work from home.

Depending on the type of business, there are some risks that companies should consider before closing down their office buildings and moving their workforce into home offices.

Training – Bringing on new employees who are working remotely can be a challenge for hiring managers.

Teamwork and Collaboration – Companies need to make sure that they find ways to keep their team engaged. Working remotely can sometimes feel isolated for certain personality types.

Company Culture – Driving company culture is much easier to do when everyone is in the same workspace. Companies that have shifted to remote work are finding new ways to drive consistency in their company culture and values.